Technology could deliver USPS from debt

Postmaster General John Potter says if lawmakers don't take action, the U.S. Postal Service will face a shortfall of $238-billion dollars in the next 10 years.

Bob Otto, a former Chief Information Officer and Chief Technology Officer at USPS and now the head of the Advisory Services Division at Agilex, suggests the Postal Service look back a decade for ideas to improve the next one.

Technology has enabled the postal service to move forward over the past ten years. What took 70 employees one hour to sort 35,000 letters, today two employees sort that same volume of letters. And over the last ten years with automation, mechanization, and information technology, we've been able at the Postal Service to decrease the number of employees who process the mail by more than 200,000. If you think about this, the USPS is on par with UPS and FedEx for performance, and these are two companies who are real innovators in the use of technology.

Get Netcentric

Otto said the internet is a mixed blessing. "The continued growth of the internet is both a threat and an opportunity for businesses and for the Postal Service."

Recipients could choose their preferred delivery model for various types of mail. so in terms of electronic mail recipients like you and me, we get spam every day, we don't know the identity of our senders, we have cybersecurity issues every day, and none of us wants to have our identity stolen. So across the internet, we really don't know who's on the other end of the wire talking to us. So at some point the Postal Service could offer certified electronic mail that could be used to address some of these concerns.

Suppose, said Otto, you could send a hybrid electronic and snail mail that was certified as to: 1) who it came from, 2) that it's spam and security-threat free, and 3) when you send an e-mail you were assured it's tamper free.

Otto said it's that sort of hybrid service that needs to be examined.

Take FedEx. They offer a similar transformation as they integrated Kinkos into their operations. So the Postal Service offering a hybrid mail service, which they're working on, integrating both electronic and physical delivery, would allow a person to send an electronic document through the Postal Service, print it locally where the carrier can pick it up and deliver it locally, and that would take out the cost for mail processing, sorting, and long haul transportation. So the customer would get a quick, assured delivery of the document and it wouldn't require the Postal Service to have all this large infrastructure that it has today.

Business Plan Changes

"The Postal Service needs six things changed," said Otto, "five of which aren't even in their control."

According to the USPS, those changes are:

• Restructure retiree health benefits payments to be consistent with what is used by the rest of the federal government and the majority of the private sector and address overpayments to the Postal Service Civil Service Retirement System pension fund.

• Adjust delivery days to better reflect current mail volumes and customer habits.

• Continue to modernize customer access by providing services at locations that are more convenient to customers, such as grocery stores, pharmacies, retail centers, and office supply stores. Increase and enhance customer access through partnerships, self-service kiosks and a world-class Website.

• Establish a more flexible workforce that is better positioned to respond to changing demand patterns, as more than 300,000 employees become eligible to retire in the coming decade.

• Ensure that prices of Market Dominant mailing products are based on demand for each individual product and its costs, rather than capping prices for every class at the rate of inflation.

• A modest exigent price increase will be proposed, effective in 2011.

• Permit the Postal Service to evaluate and introduce more new products consistent with its mission, allowing it to better respond to changing customer needs and compete more effectively in the marketplace.

Otto points out "all of these policy changes require Congress. Those are all under control of Congress, not the Postal Service."

For more on the business plan changes from Bob Bernstock, president of the Mailing and Shipping Services division of the Postal Service, on the Daily Debrief, click here.